The Government of the Balearic Islands has activated in March 2026 a direct non-repayable grant of 10,000 euros for people under 40 buying their first habitual residence in the archipelago. The measure, backed by a budget of 6 million euros, is part of a broader housing access package that also includes tax benefits on Property Transfer Tax (ITP) and a public mortgage guarantee scheme. In a market where prices rose an average of 13.4% in 2025, these grants could make the difference between being able or unable to buy.
What does the direct grant consist of?
This is a direct grant — not a loan — of 10,000 euros that the Balearic Government pays outright to eligible young buyers. The money can be used to cover part of the deposit, notary fees, transfer tax or other acquisition costs. The total budget of 6 million euros means the measure can benefit approximately 600 buyers while funds remain available.
- Amount: 10,000 euros, non-repayable
- Total budget: 6 million euros (≈ 600 beneficiaries)
- Purpose: first habitual residence in the Balearic Islands
- Not a loan: no repayment required
- Compatible with other national and regional housing grants
Requirements to qualify
The requirements published by the Government set conditions for both the buyer and the property. It is important to verify compliance with all of them before starting the purchase process.
- Age: under 40 at the time of application
- Residency: registered in the Balearic Islands for at least the last 5 years
- First home: must not own any other property anywhere in Spain
- Use: the property must become the buyer's permanent habitual residence
- Maximum price in Mallorca: 307,000 euros (Ibiza: 370,000 €; Menorca: 285,000 €)
Property price limits by island
The maximum eligible property price varies by island, reflecting the different market conditions across the archipelago. For Mallorca, the limit is set at 307,000 euros, which excludes most of the new-build market and prime areas of the island, but covers a significant portion of the second-hand market in residential towns and peripheral municipalities.
- Mallorca: maximum 307,000 euros
- Ibiza: maximum 370,000 euros
- Menorca: maximum 285,000 euros
Additional tax benefits: reduced or zero transfer tax
In addition to the direct grant, the package includes a significant reduction in Property Transfer Tax (ITP — Impuesto de Transmisiones Patrimoniales), which normally stands at 8% of the purchase price in the Balearic Islands. For young buyers, the conditions are considerably more favourable:
- Under 30 years old: full ITP exemption (saving up to 24,560 € on a 307,000 € property)
- Between 30 and 36 years old: ITP reduced to 4%, half the standard rate
- Condition: must be a first habitual residence meeting the general eligibility requirements
This tax benefit is particularly significant because ITP is one of the largest costs when buying a second-hand property. On a 307,000-euro property, standard ITP would amount to 24,560 euros; with the full exemption for under-30s, that cost disappears entirely. Combined with the 10,000-euro direct grant, a buyer under 30 could save over 34,000 euros in acquisition costs.
Young Mortgage Scheme: up to 90% financing with public guarantee
The third pillar of the package is the Hipoteca Joven (Young Mortgage) programme, through which the Institut Balear de l'Habitatge (IBAVI) acts as a public guarantor, enabling young buyers to access financing of up to 90% of the property value. The standard bank requirement — a maximum of 80% financing — means buyers must have 20% of the price plus costs saved in advance. With the public guarantee, that figure drops to 10%, substantially reducing the savings required upfront.
- Guarantee coverage: up to 90% of the assessed value
- Managed through the Institut Balear de l'Habitatge (IBAVI)
- Compatible with the 10,000-euro direct grant
- Allows buyers to purchase with less upfront savings
Context: the Balearic Islands, Spain's second most expensive housing market
These measures come at a time when housing access in the Balearic Islands has become one of the archipelago's most pressing social issues. According to data published alongside the announcement, the Balearics recorded an average price increase of 13.4% in 2025 compared to 2024, making it the second most expensive autonomous community in Spain for residential property, behind only Madrid. In Mallorca, the combination of high international demand, limited land supply and planning restrictions has created a structurally stressed market where local profiles with median incomes face growing difficulty buying on the island where they live and work.
Frequently asked questions
When can I apply for the 10,000-euro grant for young buyers in Mallorca?+
The Government activated the programme in March 2026 with 6 million euros reserved. Applications are processed through the Institut Balear de l'Habitatge (IBAVI). It is advisable to apply as early as possible given the limited budget covering approximately 600 beneficiaries.
Can the 10,000-euro grant be combined with the ITP tax exemption?+
Yes. Both measures are compatible. A buyer under 30 can simultaneously access the 10,000-euro direct grant, the full ITP exemption and the Young Mortgage public guarantee scheme. The combined saving can exceed 34,000 euros in total acquisition costs.
Does the 307,000-euro price limit in Mallorca include taxes and fees?+
The 307,000-euro limit refers to the purchase price stated in the deed, not including notary fees, land registry costs or taxes. It is important to confirm that the agreed price with the seller does not exceed this threshold before formalising the transaction.
I am between 36 and 40 years old. Can I get the direct grant but not the ITP reduction?+
Yes. The 10,000-euro direct grant applies to all buyers under 40 who meet the requirements. The 4% reduced ITP applies to buyers aged 30–36, and the full ITP exemption applies to under-30s. Between 36 and 40, the standard 8% ITP rate applies, but you can still access the 10,000-euro grant and the Young Mortgage scheme.
Do the 5 years of Balearic residency need to be continuous?+
The published requirement states a minimum residency of 5 years in the Balearic Islands, without specifying whether these must be continuous or cumulative. For official clarification on this point, it is advisable to consult directly with the IBAVI or a specialist adviser before starting the application.
Looking for a property in Mallorca within this price range?
At Benavides Real Estate we cover the Mallorca residential market across all segments. If you are looking for your first home and want to take advantage of these grants, we can help you find eligible properties and guide you through the entire purchase process.
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